Committee Assesses CU Investment Ethics

The advisory committee that makes recommendations to the University Board of Trustees on how to invest the school’s endowment ethically will hold its annual town hall meeting this Tuesday.

The Advisory Committee on Socially Responsible Investing was established in March 2000 by then-University President George Rupp with the approval of the trustees. Each year the committee reviews the shareholder proposals of companies in which Columbia owns stock, and submits a report with recommendations on each issue raised to the Board of Trustees’ Subcommittee on Shareholder Responsibility, which has executive power regarding the proposals.

ACSRI’s existence is noteworthy because, according to officials, the committee sets an example for other universities. Columbia was “one of the first ones [universities] to establish such a committee,” chair Jack McGourty said. “We still are in a leadership position when it comes to our peer schools in terms of having such a committee.”

The committee includes four faculty members, four students, and four alumni nominated by student government organizations and University administrators, and approved by the ACSRI chair and manager, the executive vice president for finance, and the University president.

This spring, the ACSRI delivered recommendations on banking issues, equal employment, arms sales to foreign countries, and a variety of other
shareholder proposals.

“We review 80 to 90 of these resolutions in a year based on the investments that are in the endowment—quite a number,” McGourty said, adding that the annual town hall “allows for an ongoing engagement with students.”

The November 2007 town hall provided an opportunity for humanitarian student groups to voice their concerns about companies then held in Columbia’s investment portfolio. The Burma 88 Coalition spoke against Chevron’s contractual transfer of millions of dollars to the ruling regime in Burma that they believed implicated the company in human rights violations. At the same meeting, students from Amnesty International raised concerns about Dow Chemical’s acquisition of a company responsible for a 1984 industrial accident in Bhopal, India that killed thousands of people.

The ACSRI may recommend communication with the management of a corporation or divestment, the sale of all shares and the end of involvement with a company.

“In general, there’s no clear evidence which action is more efficacious,” McGourty said regarding the decision between communication or divestment. “We are definitely in favor of responsible engagement. So we certainly feel that continuing to own shares in a company allows us to engage with the company ... If we don’t own any shares, then we don’t have that vehicle to engage with.”

But McGourty noted that for major social concerns like the Darfur conflict, coordinated divestment by many investors simultaneously can be effective.

ACSRI member Hannah Lee, CC ’09, said the committee’s Web site is very informational and transparent, but noted that it is little known on campus.

The ACSRI town hall will take place on Tuesday from 6 to 8 p.m. in Carleton Cafeteria in Mudd.

david.xia@columbiaspectator.com